BAT Sales Down in First Three Months

Source from:  Tobacco Reporter 04/29/2010

British American Tobacco's volume sales during the three months to the end of March, at 168 billion, were down by one per cent on those of the three months to the end of March 2009. Sales in the company's Asia-Pacific region rose from 43 billion to 45 billion and sales in the Americas, at 38 billion, were stable. But sales in Western Europe were down from 30 billion to 29 billion, those in Eastern Europe were down from 27 billion to 25 billion, and those in the Africa and Middle East region were down from 32 billion to 31 billion. Sales in the Asia-Pacific region were boosted by those of Bentoel, which was acquired by BAT in June last year, which has since grown volumes and share in Indonesia, and which contributed five billion sticks to BAT's total volumes. BAT's volumes, discounting the effect of acquisitions, were down by four per cent, which the company said was in line with overall market declines. "Significant industry volume declines in markets such as Brazil and Romania, where Group market share grew, and in Ukraine and Japan, where market share was maintained, drove this volume decline," BAT said in issuing its interim management statement for the first three months of this year. "The adverse impact on Group volumes was highest in the low-priced segment…" "The four Global Drive Brands delivered a good performance and achieved overall volume growth of six per cent and share growth in a number of key markets. Dunhill was up 24 per cent, helped by the migration of Carlton to Dunhill in Brazil, while Lucky Strike grew by eight per cent and Pall Mall by 10 per cent, respectively. Kent volumes were 12 per cent lower mainly driven by industry volume declines in Japan, Russia and Romania, despite growing or maintaining market share in those markets." "Market share in our top 40 markets was in line with the start of 2009 and ahead of our Q4 2009 share." BAT noted that this performance was achieved against lower industry volumes in a number of important markets, such as Japan, Brazil, Russia, Romania and Turkey. "The general economic environment with rising levels of unemployment, together with increases in excise, resulted in continued pressure on the premium segment and in some markets, particularly in Central and Eastern Europe, there was down-trading to illicit trade, affecting the low price segment," it said. "The Group continued to address its cost base and, amongst other initiatives, finalised the consultation process with a view of consolidating the sales and marketing organisations in the Benelux markets as well as entering information and consultation on the future of the Jawornik factory in Poland." "Our consumers are clearly finding economic conditions difficult and volumes suffered as a result of market size declines," said chief executive, Paul Adams. "However, there was continued pricing momentum and good growth in market shares, leading to solid revenue growth. We remain on track for the year." Enditem